Rockford sports complex tab may hit $18M

ROCKFORD — Recasting the old Ingersoll factory downtown into an indoor sports center by 2015 may cost millions of dollars more than first thought.

INSIDE: How Rockford is paying for it

Kevin Haas and Isaac Guerrero

BELOW: How Rockford is paying for it

ROCKFORD — Recasting the old Ingersoll factory downtown into an indoor sports center by 2015 may cost millions of dollars more than first thought.

The city estimated in January that the sports center would cost $15 million. Architects hired in the spring have refined those estimates and identified additional costs. The entire floor of the old factory, for example, must be raised a couple of inches because the build sits too low along the riverfront, said Pat Zuroske, the city’s capital project manager.

“We’re thinking the development is going to be in the roughly $18 million range, but that could be revised all the way down to $15 million if we get good (construction) bids,” Zuroske said.

The good news? Financing is nearly in hand for the indoor sports center and more dollars soon may be available to enhance Sportscore One in northwest Rockford and Sportscore Two in Loves Park. Improvements at all three sites would allow the region to reclaim its dominance in the sports tournament business, which supports hundreds of jobs and pumps millions of dollars into the local economy.

Regional effort
After a year spent clearing political hurdles, lawmakers passed legislation this summer that allows Rockford and its neighbors to enact higher hotel taxes to pay for the facility upgrades. Absent Gov. Pat Quinn’s signature, the bill will automatically become law by mid-August.

The bill allows Winnebago County and local governments within it to increase the hotel bed tax 2 percentage points above the current local rate. In Rockford, the current rate is 6 percent.

The legislation requires Rockford, Loves Park, Winnebago County and other municipalities to sign a contract committing each local government to share the cost of the facility improvements. A Northern Illinois Tourism Board consisting of representatives from each jurisdiction would be established to administer the collection and expenditure of the additional hotel tax revenues.

County Board members, aldermen and village trustees will be given draft agreements to consider by mid-September, Park District Director Tim Dimke said. The contracts would be adopted in tandem with the hotel tax increases.

Higher hotel taxes in the region are expected to generate $15 million over 20 years to repay bonds that would be sold immediately to finance construction. About $12 million of that revenue would come from Rockford hotels. The city has dedicated $9 million of those funds to improve Sportscore Two, $2 million for the Ingersoll project and $1 million for Sportscore One.

“Rockford’s commitment to spend the majority of those funds in Loves Park is a testament to regionalism,” Dimke said. “That’s what this project is all about.”

Ingersoll plans advance
Design work is underway for the Ingersoll makeover that will determine everything from the optimum size of playing courts to the type of flooring to the appearance of the building entrance. The actual cost of the sports center won’t be clear until those details are final and construction bids have been accepted, Zuroske said.

Some elements have been scratched off the drawing board already. A skate park planned for inside the sports center exceeds the city’s project budget, so it won’t be built, at least for now, Zuroske said.

“We’re not ruling that out for future development on the site, but the reality is we can’t use the southern part of the building because it’s way too expensive to rehab,” Zuroske said.

Overflow parking remains a concern. Rockford aldermen killed a deal in April to purchase the nearby Watch Factory building. The 3.4-acre property would have provided room for overflow parking, but Council members worried about the $580,000 asking price amid concerns that additional tax dollars would be needed to demolish the building and construct parking.

Nevertheless, the indoor sports center is on track for a spring 2015 debut. Dimke said the district will begin to book the facility for trade shows and wrestling, cheerleading, chess, pickleball, basketball, volleyball and other tournaments once the construction schedule is final.

“Anything that can fit on 90,000 square feet of hard court we’ll be looking to bring in,” Dimke said.

Downtown sports complex: how Rockford is paying for it
The city of Rockford has secured two state grants — worth a combined $7.1 million — to pay for the Ingersoll makeover, which may cost up to $18 million.

The Rockford Park District will chip in $2 million — $100,000 a year over the life of a 20-year bond. Additional funds will come from hotel tax revenue and the city’s Redevelopment Fund, a revenue stream the city uses to subsidize downtown redevelopment projects and the operation of the BMO Harris Bank Center, Coronado Performing Arts Center and Davis Park.

The Redevelopment Fund — fueled by sales taxes at restaurants and taverns and packaged liquor sales — had been buried in debt for years. The red ink was largely erased in January following the switch to private management of the city’s downtown entertainment venues: BMO Harris Bank Center, Coronado Performing Arts Center and Davis Park.

Rockford does not levy a utility tax, nor does it possess home rule powers, which would give the city power to govern and tax itself beyond what state law allows. The Redevelopment Fund, then, remains one of the few tools the city has to pay for economic development projects to entice private development.

Tapping the Redevelopment Fund to pay for the indoor sports center will limit its ability to pay for other economic development initiatives until 2018. By then, the city will have paid off the last of the debt it incurred for the Coronado theater, which reopened in 2001 after an $18.5 million restoration.

However, the Redevelopment Fund won’t significantly affect cash flow for another decade, assuming city leaders make no further spending commitments on the fund. Revenues will outpace expenses by $251,471 in 2018, according to city budget estimates. The annual fund surplus would grow to $703,625 in 2023 and more than $3.2 million by 2028.